GST revenue growth rate slows in Sep, collections at Rs 1.73 lakh cr

New Delhi: The growth rate of Goods and Services Tax (GST) revenue dropped to 6.5 per cent in September, totaling Rs 1.73 lakh crore, due to a slowdown in collections from both domestic transactions and imports. Tax experts predicted that collections are likely to improve in the upcoming months due to the upcoming festival season. Government data released on Tuesday showed that GST collections were Rs 1.63 lakh crore in September last year, compared to Rs 1.75 lakh crore in August 2024. The domestic gross revenue increased by 5.9 percent to approximately Rs 1.27 lakh crore. Income generated from the importation of goods increased by 8 percent, amounting to Rs 45,390 crore. During the month, refunds totaling Rs 20,458 crore were given out, showing a 31 per cent growth compared to the same period last year.

After making changes to refunds, the total GST revenue in September was Rs 1.53 lakh crore, showing a 3.9 pc  increase compared to the same period last year. During the April-September period of the current fiscal year, there was a 9.5 percent increase in GST collections, totaling more than Rs 10.87 lakh crore. According to Pratik Jain, a Partner at PwC India, the GST revenues for the year so far have increased by more than 9 pc, but the monthly growth may be lower than anticipated. This might require further examination by the GST Council, especially after the rate rationalization process. "With the approaching holiday season, the collection for the next few months may improve," Jain explained.           

Deloitte India Partner MS Mani emphasized the importance of closely monitoring GST revenues in the upcoming months, as they serve as an indicator of economic growth and can be linked to GDP figures. Nevertheless, the substantial rise in GST reimbursements, particularly IGST Export reimbursements, showcases the tax authorities' endeavors to speed up refunds and the policymakers' efforts to streamline the refund procedure. Mani expressed hope that the tepid single-digit growth in GST revenues in several large states would improve in the upcoming months. EY Tax Partner Saurabh Agarwal noted that the marked uptick in GST refunds for exports indicates a considerable surge in India's export. Furthermore, the rise in GST refunds reflects the government's dedication to promptly providing funds to help exporters and industries with inverted duty structures maintain their working capital.